China's Golden Week - A Good Time To Make Sure You Don't 'Bite The Wax Tadpole'

After the flurry of news and activity around the Alibaba IPO, a much needed respite in China and the China business world has arrived.

October 1 is China's National Day holiday, this year marking the founding of the People's Republic of China 65 years ago. It is like the 4th of July and Memorial Day combined and most of China is off work for the entire week. It is also called "Golden Week" because Chinese citizens engage in an orgy of consumption and travel for the holiday.

National week, like the week long holiday at Chinese New Year, also means most companies who work in and with China are on hold as well. This makes it a great time for companies already in China or seeking to engage China to reflect on how they are faring, whether they are making goods or selling their products there. Most failures come back to a lack of understanding the importance and complexities of integrating Chinese history (including National Day), language, society and philosophy into building successful relationships in China.

A nation’s culture resides in the hearts and in the soul of its people.

—Gandhi

When we advise companies on entering, growing, or changing course in China, we always start with a deep background on culture and history. “Why?” some of our clients ask. “We didn’t come to you for a history lesson or a course in Chinese sociology and ethnology. We came to you for a strategy on how to operate and sell in China” or “I can take language lessons online."

It is. Knowing their history and culture is a prerequisite for understanding and succeeding with Chinese consumers. You don’t personally have to master the Chinese language, culture, history, and mind-set to be successful in China. But you have to listen to the people who have done so. Otherwise, one can too easily see the suits and the coffee, the wine, and the BMWs, and conclude that China is a westernized society. It’s too simplistic to conclude that appealing to Chinese consumers should be no different from than appealing to consumers in a western culture, say, Brazil—or an Asian market that also developed since the 1970s, say Korea or Japan, and it is also too simplistic to assume they don’t respond to many of the things we do, rather you want to find that right mix between change everything and change nothing for China.

Chinese culture, commercial infrastructures, and society have a deeply established logic all their own, built over long periods of time. Creating trust, fostering peer recommendations, and building personal relationships with Chinese customers is a must—and they all depend on your understanding of the culture.

Even the most sophisticated of consumer marketing giants can be tripped up by something as obvious as the importance of language. Early translations into Chinese for the quintessential brand, Coca-Cola actually used completely inappropriate written characters to render the phonetics of the brand name. Sure, “ke kou le la” sounds right, but every syllable in Chinese has numerous homonyms. If the characters cause mass confusion and draws hysterical laughter because they mean “bite the wax tadpole,” then you’ve completely failed to meet the Chinese in the hallway of cultural relevance.

Fortunately when Coke re-entered China after "Reform and Opening," it knew to put some resources into understanding the importance of language. It researched 40,000 characters to find a phonetic equivalent that also translated to something meaningful and descriptive about the product. “Ke kou ke le,” - “Happiness in the Mouth.”

Coke wasn’t the only beverage company to underestimate the importance of language. When Pepsi entered China, it launched with the slogan, “Pepsi Brings You Back to Life.” It found the proper Chinese translation and launched its campaign. What Pepsi didn’t realize was that the phrase, due to improper translation, was “Pepsi brings your ancestors back from the grave.” This is not a good marketing strategy in a country where ancestor worship is an important part of the culture.

A golden Chinese dragon with a star over a red field. The dragon was modified from the Qing flag (Photo credit: Wikipedia)

More recently, we had to advise a home-decoration company about its over-reliance on white candles. In China, white candles are a sign of death and funerals. The response we get from many company leaders is not surprising. Most international companies understand that some allowance has to be made for differences in culture, law, logistics, and tastes when entering new markets. But many do not understand the profound and myriad differences that exist between China and the United States, Germany, France, or Brazil.

When a Canadian company operates in England, an American company markets in France, or a Brazilian company in Spain, there is shared sense of history, culture, language, and attitudes about life’s meaning. Yes, there are some major and many minor differences between the cultures and tastes of consumers, but they all operate from a fairly consistent cultural blueprint.

Consider that western nations share some major cultural and historical factors:

• A knowledge of and values based in Judeo-Christian religion, philosophy and guiding principles

• A Newtonian understanding of science

• Founding principles of modern society in the Enlightenment

• A Smithian understanding of free markets

• A long history of democracy, free markets, and consumerism

• A linear understanding of time and history

• Business conducted in a transactional manner

• A European foundation of society and culture that was spread to North and South America, Oceania, and other regions

• A common alphabet

• Similar foods and drink, and a culture that celebrates with alcohol

• A philosophical orientation towards individual freedom and identity

China on the other hand has:

• A Confucian/Buddhist/Taoist religio-philosophical tradition, and a government that openly declares itself atheist

• A circular and cyclical understanding and sense of time, history, and relationships

• An almost purely Chinese foundation of societal and cultural norms, so powerful that they have shaped the societies and norms of Japan, the Koreas, and SEA over the course of 3,000 years. There was an abundance of culture exported out of China, but very little culture imported in

• The written language uses 30,000 characters—not letters—providing for much more nuance than western languages and alphabets

• Colors and number have an outsize significance in China that is almost nonexistent in the West

• A long history of commerce, driven by government and conducted by clans

• An intense and passionate food culture (while Chinese people drink alcohol, the culture is far more centered on food than drinking)

• Status, identity, and sense of security are grounded in the group.

It is important to learn what shapes Chinese society, culture, and thinking before you can sell a product or service to its consumers. Those hoping to connect with China’s super consumers must absorb and internalize the fact that success or failure will largely hinge on an understanding of the Chinese nation’s self-image, its diverse regions, and its individuals. China’s deep roots in history, language, philosophy, and culture trump the convergence theory, which states that once people achieve a certain threshold of disposable income, they will spend in similar patterns to people at similar disposable income levels in other cultures.

The mindset of the Chinese businessperson and consumer creates the consumer’s self-image; his idea of his place in society and the universe; and his ambitions, needs, desires, likes and dislikes. The mindset translates to purchase motivators. Purchase motivators will and must determine your product design, shape, size, color, price, selling channel, branding, marketing, and benefits.

Often when a company or product fails in China, it is because these cultural building blocks—history language, philosophy, and culture—were not a central focus from day one.

Just to make this even more interesting, here’s a fact that might be obvious given the geography of China and the length of time over which regional differences have evolved: China and Chinese people are not monoliths. We approach China as 22 distinct markets. (More on that in later chapters.) As a start, consider that China is continental in size and is quite diverse in climate, geography, cultural influences, language, food, esthetic values, and spiritual beliefs.

Now factor in China’s collective memory. Over the course of 4,000 years of civilization, the Chinese have seen and been many things: sometimes powerful and sometimes weak, wealthy and poor, an occupying power, and an occupied country. The reason you need to know Chinese history is because the Chinese, consciously or not, define themselves by their history.